EUR/GBP’s fall from 0.9324 extended lower last week and broke key 0.8891 cluster support (50% retracement of 0.8472 to 0.9324 at 0.8856). The development dampened our original bullish view. Initial bias is back on the downside this week for 61.8% retracement of 0.8472 to 0.9324 at 0.8797. Sustained break will target 0.8472 key support. On the upside, above 0.8974 minor resistance will turn intraday bias neutral first.
In the bigger picture, the failure to sustain above 0.9305 (2017 high) suggests that consolidation from there is extending. Breach of 0.8472 cannot be ruled out but downside should be contained by 38.2% retracement of 0.6935 (2015 low) to 0.9305 at 0.8400. On the upside, firm break of 0.9327 will confirm up trend resumption.
In the long term picture, we’re holding on to the view that rise from 0.6935 (2015 low) is resuming the up trend from 0.5680 (2000 low). As long as 0.8472 support holds, further rise should be seen through 0.9305 to 0.9799 and above down the road.